CLP Licensing Procedures & Policies 3 — Questions and Answers
Question 1: A 'reach-through royalty' provision in a research license requires payment based on:
- The number of researchers using the technology
- Sales of products ultimately developed using the licensed research tool (Correct answer)
- Annual renewal fees regardless of usage
- The licensor's own sales revenue
Correct answer: Sales of products ultimately developed using the licensed research tool
Reach-through royalties entitle the licensor to a percentage of future commercial product sales that result from use of the licensed research tool.
Question 2: Under U.S. antitrust law, which licensing practice is considered per se illegal?
- Charging different royalty rates for different licensees
- Price-fixing among competing licensees facilitated by a licensor (Correct answer)
- Granting exclusive licenses
- Imposing field-of-use restrictions
Correct answer: Price-fixing among competing licensees facilitated by a licensor
Price-fixing arrangements coordinated through licensing agreements between competitors are per se violations of antitrust law regardless of intent.
Question 3: In a cross-licensing arrangement, both parties typically agree to:
- Merge their IP portfolios permanently
- Grant each other rights to use specified patents owned by the other party (Correct answer)
- Jointly file for new patents together
- Pay royalties only to a neutral third party
Correct answer: Grant each other rights to use specified patents owned by the other party
Cross-licensing involves each party granting the other a license to use defined patents, often to resolve blocking patent situations or enable combined technologies.
Question 4: What is the significance of the 'effective filing date' under the America Invents Act (AIA)?
- It determines when royalty payments begin
- It establishes priority in a first-inventor-to-file system (Correct answer)
- It sets the expiration date of the patent
- It determines jurisdiction for licensing disputes
Correct answer: It establishes priority in a first-inventor-to-file system
Under the AIA, the effective filing date determines patent priority in the first-inventor-to-file system that replaced the prior first-to-invent system.
Question 5: A licensor's failure to mark licensed products with a patent number can affect damages by:
- Eliminating all rights to future royalties
- Limiting recovery to damages only from the date the infringer received actual notice (Correct answer)
- Voiding the license agreement entirely
- Transferring the damages claim to the licensee
Correct answer: Limiting recovery to damages only from the date the infringer received actual notice
Under 35 U.S.C. § 287, failure to mark limits patent damages to the period after the infringer received actual notice of infringement.
Question 6: Which element is MOST critical when defining the scope of a trademark license to maintain licensor quality control?
- A fixed royalty rate
- Specifications governing the quality and standards of licensed products or services (Correct answer)
- Geographic exclusivity provisions
- A minimum sales guarantee by the licensee
Correct answer: Specifications governing the quality and standards of licensed products or services
Quality control provisions are essential in trademark licenses because failure to control licensed use can result in 'naked licensing' and trademark abandonment.
Question 7: In the context of licensing negotiations, BATNA refers to:
- Best Available Terms Negotiated Annually
- Best Alternative To a Negotiated Agreement (Correct answer)
- Bilateral Agreement Terms and Norms for Arbitration
- Base Amount Triggering Negotiation Adjustment
Correct answer: Best Alternative To a Negotiated Agreement
BATNA (Best Alternative to a Negotiated Agreement) defines each party's fallback position if negotiations fail, setting the floor for acceptable deal terms.
CLP Licensing Procedures & Policies 3
A 'reach-through royalty' provision in a research license requires payment based on: